Telkom cuts workforce by 9.5%

Telkom said it reduced its employee count by 9.5% during the financial period ended March 2013, to 19,197, from 21,209  before.

Shares in the group dipped 1% to R41.73 in early trade on the JSE, after reporting a marginal rise (1.1%) in group operating revenue for the year ended March 2014, to R32.483 billion.

Telkom reported an operating profit of R4.6 million, from a prior loss of R11.15 million in 2013.

Headline earnings per share, excluding the once off items, increased 35.1% to 388 cents, it said.

The group said that employee expenses were 2.7% lower due to lower full time salary cost as its headcount decreased.

Part time employee costs, lower provision for bonus and lower overtime also contributed to the decrease.

The telco said that this was negated by a 6.8% average salary increase for bargaining unit employees, a 3.6% average salary increase for management employees and a R103 million curtailment loss on the retirement fund in the 2014 financial year.

The curtailment loss, it pointed out, relates to the impact on plan assets as a result of the
closing of the voluntary severance and early retirement packages offered in the 2013 financial year.

Telkom is currently concluding its “Fit for the Future” project, which include management structure changes and job cuts.

It has targeted 1 August 2014, as the date “for the new organisation”.

Bloomberg reported in May that Telkom planned to target white, male employees, and affecting more than 2,600 managers.

White males account for 38% of senior management and 39% of middle management, according to Telkom’s 2013 annual report.

Unions meanwhile, put the number at approximately 1,000 senior employees, who are facing the axe.

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Telkom cuts workforce by 9.5%